We’ve had a fair amount of time to think about a topic that surfaced before recession hit us just over three years ago. The end of globalisation is still being discussed, and the longer the world battles meagre growth, the more intense the conversation is likely to become. But does that suggest any particular outcome – is the fabric of international commerce really coming apart at the seams?
Multiple arguments for the end of globalisation have been made. Neo-protectionism in the early days of the recession was perhaps the most compelling argument. Fears of financial market contagion led to talk of more subtle regulatory forms of protectionism. Supply-chain risk – highlighted by last year’s devastating natural disasters – prompted re-thinking of the current globalisation model. Fears that globalisation is responsible for widening income disparity continues to feed globo-skepticism. And then there’s the sustainability argument: globalisation leads to sky-high commodity prices, which makes international shipment too expensive, leading to neo-localisation of commerce.
Data argue against globalisation’s demise. Global exports are up 6.5% through last October, almost double our projected world GDP growth for the year. Recent performance is uneven, but there are more regional zones that are well into the black than otherwise. Foreign investment has not been as promising, but as it typically lags the cycle, it is too early to pick on this indicator. Read more or watch the video here.
